While the crisis that rocked the financial technology markets earlier this year seems to have stabilized, fintech companies are now facing a problem that may prove just as deadly: investor apathy. The wealthtech industry, which on its own saw just under $25 billion in investment capital last year, is now on track to bring in only $17.6 billion for 2022, according to Fintech Global. That dip has industry experts worried for the future of fintech.
As KPMG’s Canadian National Industry Leader for Financial Services Geoff Rush put it in a statement, “The market downturn and ensuing lower tech valuations caused investors to hit the 'pause button' over the last few months. We expect fintech to continue to draw interest in the second half of the year, but investors will be more selective about where they deploy capital.”
In other words, the previous fintech playbook, under which it was possible for a hot new company to hit unicorn status on little more than hype, is now completely out the window. As Rush and other industry veterans have pointed out, the companies that are more likely to secure lasting investment pathways are those that have not only developed hot new technology, but have built sustainable partnerships with traditional financial institutions and major global brands.